Segment Information

9 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

The following tables present revenue for each reportable segment and Corporate:

	Three Months Ended March 31
(in millions)	2016			2015
Pharmaceutical	$	27,527		$	22,605
Medical	3,138			2,774
Total segment revenue	30,665			25,379
Corporate (1)	(3		)	(4		)
Total revenue	$	30,662		$	25,375

	Nine Months Ended March 31
(in millions)	2016			2015
Pharmaceutical	$	80,954		$	66,440
Medical	9,220			8,540
Total segment revenue	90,174			74,980
Corporate (1)	(12		)	3
Total revenue	$	90,162		$	74,983

(1) Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.

We evaluate segment performance based on segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment distribution, selling, general, and administrative ("SG&A") expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology, and legal and compliance. The results attributable to noncontrolling interests are recorded within segment profit. Corporate expenses are allocated to the segments based on headcount, level of benefit provided, and other ratable allocation methodologies.

We do not allocate the following items to our segments: LIFO inventory charges/(credits); restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges, net; other income, net; interest expense, net; loss on extinguishment of debt; and provision for income taxes.

In addition, certain investment spending, certain portions of enterprise-wide incentive compensation, and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $9 million and $6 million for the three months ended March 31, 2016 and 2015, respectively, and $20 million and $12 million for the nine months ended March 31, 2016 and 2015, respectively.

The following tables present segment profit by reportable segment and Corporate:

	Three Months Ended March 31
(in millions)	2016			2015
Pharmaceutical	$	660		$	567
Medical	128			102
Total segment profit	788			669
Corporate	(132		)	(78		)
Total operating earnings	$	656		$	591

	Nine Months Ended March 31
(in millions)	2016			2015
Pharmaceutical	$	1,945		$	1,559
Medical	335			330
Total segment profit	2,280			1,889
Corporate	(441		)	(286		)
Total operating earnings	$	1,839		$	1,603

The following table presents total assets for each reportable segment and Corporate at:

(in millions)	March 31, 2016		June 30, 2015
Pharmaceutical	$	20,633	$	17,385
Medical	9,984		7,095
Corporate	3,438		5,662
Total assets	$	34,055	$	30,142